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Payroll Certification: An Alternative to Effort Reporting

Feb 22, 2016




Payroll Certification: An Alternative to Effort Reporting. NCURA FRA Rich Andrews, UC Irvine Mike Laskofski, George Mason March 11, 2013. Why Monitor Effort/Salary?. Salary and wages account for approximately 60% of all sponsored expenditures - PowerPoint PPT Presentation

Mason Template 1: Title Slide

Payroll Certification: An Alternative to Effort ReportingNCURA FRARich Andrews, UC IrvineMike Laskofski, George MasonMarch 11, 20131Where Innovation Is TraditionWhere Innovation Is Tradition1Why Monitor Effort/Salary?Salary and wages account for approximately 60% of all sponsored expendituresCertification of salary and wages on federal awards is required by the federal governmentKey area of focus by auditors to verify what was proposed was actually done2Where Innovation Is TraditionEffort Reporting: Why Change?Effort incurred across multiple activities is difficult to measureEffort reports provide limited controlsAdministration is inefficient and costly

3Where Innovation Is TraditionFederal Demonstration PartnershipFederal Demonstration Partnership (FDP) began in 1986 and is a cooperative initiative among 10 federal agencies and 119 research institutionsFDP is focused on reducing the administrative burdens associated with research2005 FDP survey of over 6000 faculty reported that 42% time on federal awards spent on administrative tasks2011 FDP survey of over 13000 faculty similar results

4Where Innovation Is TraditionPayroll Certification: What is it?Payroll Certification is an alternative to Effort Reporting that uses a project based methodology and utilizes the concept that charges are reasonable in relation to work performed

5Where Innovation Is TraditionPayroll Certification: BenefitsConcept is straightforward and easy to understand by faculty and administratorsCertification timeframe consistent with project period and annual technical reportingSmaller group of certifiers allows for more effective outreach and trainingMore time to focus on key internal controls Reduced administrative burden

6Where Innovation Is TraditionGeorge Mason UniversityPublic University located in Fairfax, VirginiaEstablished in 1972Over 32,500 students on 4 campusesSponsored Expenditures FY12: $97MGeorge Mason became an FDP member in 2008

7Where Innovation Is TraditionPayroll Certification: ApprovalMason received approval from the FDP and the Office of Naval Research (ONR) effective January 1, 2011 to pilot Payroll CertificationThree other pilot schools UC Irvine (HHS), UC Riverside (HHS), Michigan Tech (ONR)8Where Innovation Is TraditionPilot Proposal ConditionsAll awards transitioned by January 1, 2012Update policies/procedures, revise DS-2, deploy training and provide ONR detailed milestone plan for implementationProvide feedback to FDP semi-annuallyDCAA review of DS-2 for adequacyMeet with ONR quarterly to review implementationReview pilot progress regularly but no stated end date

9Where Innovation Is TraditionCommunication and OutreachResearch CouncilSenior Administration (Provost, Deans)Department ChairsFaculty MeetingsOSP Advisory Group (Senior Unit Administrators)Training Sessions (50+ attendees March/April 2011)Website, Email, NewsletterIndividual support for PIs and Liaisons monthly

10Where Innovation Is TraditionPayroll Certification vs. Effort ReportingDescriptionEffort ReportingPayroll CertificationSystem FocusIndividualsProject (Grant or Contract)Timeframe for DistributionConsistent points in timeEnd of Project Budget YearCertification FrequencyThree Times per YearAnnuallyTypes of Funding All Sponsored FundsFederal FundsAnnual # of Reports2700700ApproversIndividuals charged to projectsPrincipal InvestigatorSystem RationaleEffort reasonable based on overall institutional effortSalary and wage amounts reasonable based on work performedCommitted Cost SharingShown as percentage of overall institutional effortShown as amount reasonable based on work performed 11Where Innovation Is TraditionPayroll Certification Report Samples 12Where Innovation Is TraditionWhere Innovation Is Tradition13

Where Innovation Is Tradition14

Where Innovation Is TraditionPayroll Certification ProcessOSP generates reports 60 days after the last day of the month for the anniversary date or project end date, whichever is soonerReports distributed to Payroll Certification LiaisonPayroll Certification Liaison works with PIs to obtain approval

15Where Innovation Is Tradition15Payroll Certification Process cont.Payroll Certification Liaison returns reports to OSP within 45 days of distributionReports not received within 45 days sent to Dean for follow-up and completion within 2 weeksAny reports not certified within 60 days will result in salary charges moved to a non-sponsored source of funding16Where Innovation Is TraditionAssessment of Payroll CertificationComparison to old effort reporting processSurvey completed February 2011 (150 respondents; majority faculty) to benchmark effort reporting processPayroll Certification follow-up survey will be completed Spring 2013Feedback from faculty and administrators continues to be very positive

17Where Innovation Is TraditionAssessment of Payroll CertificationDCAA DS-2 adequacy review completed Fall 2011 with no findingsThrough 20 reporting cycles (Jan 2011 thru Aug 2012)70% of reports received within 30 days compared to 33% under prior process in 201095% of reports received within 45 days 100% of reports received within 60 days

18Where Innovation Is TraditionMonitoring Effort/SalaryInclude some level of PI effort on all projectsRequest sponsor approval if PI is absent for more than 3 months or 25% reduction in PI time Avoid charging faculty 100% to sponsored funds if they have other responsibilitiesProcess funding change forms timely19Where Innovation Is TraditionMonitoring Effort/Salary contInclude complete explanations and necessary approval signaturesTrack committed cost share with activity codeComplete payroll certifications timelyAvoid funding adjustments after project period previously certifiedReview project expenses regularly

20Where Innovation Is TraditionNext Steps for George Mason PilotComplete follow-up survey Spring 2013Regular updates to FDP on pilot progress Meet with ONR quarterlyInternal Audit report March 2013IG Audit 2013 Spring 2013

21Where Innovation Is Tradition22QuestionsMike Laskofski George [email protected]

Rich AndrewsUC [email protected]

Where Innovation Is Tradition22

Payroll Certification:An Alternative to Effort ReportingRich Andrews

University of California, Irvine

March 11, 2013

University of California, IrvinePublic University located in Irvine, CaliforniaPart of a 10 campus systemFounded in 1965About 28,000 studentsFY 2011-12 research expenditures: $245MA Medical CenterNo football team

Payroll Certification: ApprovalUC Irvine received approval from the FDP and the Department of Health and Human Services (HHS) effective April 1, 2011 to pilot Payroll Certifications

UC Irvine implemented the system in August 2011

Control BenefitsFocuses on special costing rulesNIH Salary CapNSF Salary LimitClerical and Administrative SalariesNo proposal preparation charges90% to 100% federal funded salary = minimal other activitiesEasier to understandIntegrates with other controls

Payroll andPayrollDistributionHuman ResourcesEffort ReportsMonitoringProposalsWork LoadRecordsFaculty & Staff InputInternal Controls Supporting Effort Reporting Internal AuditTrainingWhistleblowerAccounting SystemPolicies andProceduresFinancial Status ReportsInternalControlsFederal GuidelinesPayroll andPayrollDistributionHuman ResourcesMonitoringProposalsWork LoadRecordsFaculty & Staff InputPayroll Certifications as an Internal Control Internal AuditTrainingWhistleblowerAccounting SystemPolicies andProceduresFinancial Status ReportsInternalControlsPayroll CertificationsFederal GuidelinesUnfocused ComplianceComplianceCosting IssuesEffort ReportsNIH Salary CapNSF Salary LimitEtc.Correct SignerTimelyEtc.Payroll Certifications Focus on Compliance Principal Investigator Co-Principle Investigator Project Accounting Support Lab Supervisors Contract and Grants Accounting Sponsored Project Administration

ComplianceComplianceEstablish Expectations

Pilot Proposal Conditions18-month pilotAll awards transitioned on April 1, 2011Pilot initially ended September, 30, 2012Pilot extended to December 31, 2013Updated policies/procedures, revised DS-2Training and new websitesTwo Internal Audit Reviews at 9 & 18 monthsFaculty and Staff surveyEmail certifications allowed

Communication and OutreachTrained Payroll Certification Coordinators

Faculty trained by Coordinators

Notified senior management

Emailed Faculty

Payroll Certification ReportsPayroll Expense Reports

Pay Certification Reports




Certification RationaleOMB Circular A-21, J.10.c.(1)(e) Plan Confirmation At least annually a statement will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed, stating that salaries and wages charged to sponsored agreements as direct charges, and to residual, F&A cost or other categories are reasonable in relation to work performed.

Payroll Certification ReportsAround the 7th of each month, Contracts and Grants Accounting notifies departments that the PCS has certifications for them to download.PCS Coordinators work with the PIs to obtain certification.The completed certification is due back in Contracts and Grants Accounting within 45 days.

Payroll Certification ReportsIf not certified within 45 days, assistant deans, finance administrators, and the Vice Chancellor for Research are notified.Policy allows for transferring uncertified salaries off sponsored projects after 60 days, but has not been enforced.

Number of Payroll CertificationsUniversity of California, IrvineMONTH 2011 2012

January 72February

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